China’s smartphone market contracted in 2025, but saw Apple topping Q4 and Huawei retaining its full-year lead.
Shipments fell 1.6% year over year in the fourth quarter and 0.6% for the full year, according to preliminary data from Counterpoint Research’s Market Monitor Tracker. The figures underscore a market still struggling to regain sustained momentum after a year marked by cautious consumer spending, intense competition, and uneven policy support.
Counterpoint noted that shipments contracted in every quarter of 2025 except the first, when government subsidies delivered a temporary boost. That pattern suggests demand remained fragile once the incentive-driven uplift faded, raising questions about how quickly the market can return to organic growth.
Q4 results highlight premium competition
Apple led China’s smartphone market in the fourth quarter with a 22% share, supported by strong traction for the iPhone 17 series and an accelerated supply ramp. The performance reflects Apple’s ability to maintain premium demand even as the broader market weakens, a sign that higher-income buyers remain willing to upgrade despite macro uncertainty.
Counterpoint said the iPhone 17 Pro series benefited from a “distinctive new camera design,” while base variants saw demand aided by a value-focused update: double the storage of last year’s equivalent at the same price. In an environment where shoppers are increasingly price-sensitive, that kind of specification upgrade without a price hike can be an effective way to defend market share.
The iPhone Air, however, delivered only a low single-digit share after a delayed launch. Senior Analyst Ivan Lam said, “The late launch and trade-offs between thinness and the feature set resulted in a slow start for the iPhone Air. But it’s a significant product, not only as an exploration into ultra-thin design, but also when considering the longer-term structural implications for the domestic market for eSIM smartphones.”
Those “structural implications” could be significant in China’s heavily regulated telecom ecosystem, where adoption of eSIM-enabled devices remains constrained compared with many global markets. If eSIM adoption expands, it could reshape device design priorities, carrier partnerships, and even supply chain decisions for both domestic and international brands.
OPPO surges to second place
OPPO moved up to second place in the fourth quarter, recording 15% year-over-year growth. Counterpoint attributed the rise to sustained demand for the Reno series, supported by incremental volumes from the newly launched Find X9 and OnePlus 15 series.
OPPO’s gains are notable because they came amid a contracting overall market, meaning the company did not merely ride broader growth but took share from rivals. The performance also highlights the strategic importance of balancing volume-driven midrange products like Reno with attention-getting flagships that can anchor brand perception and stimulate upgrades.
Huawei remains full-year leader despite second-half softness
For the full year, Huawei ranked first in China’s smartphone market, retaining leadership even as it experienced a year-over-year decline in the second half of 2025. Counterpoint said Huawei’s mid-to-high-end models performed strongly following price discounts, reinforcing its leadership position.
The discounting strategy suggests Huawei prioritized keeping shipments and visibility high amid fierce competition and consumer caution. While price reductions can help defend share, they may also compress profitability, creating longer-term pressure if component costs rise or if rivals match pricing.
Huawei’s fourth-quarter performance was weighed down by the delayed launch of the Mate 80 series relative to competing models. Counterpoint reported that a strong rebound was seen at the start of 2026, supported by a new round of subsidies, indicating that policy support remains a crucial swing factor in near-term demand.
vivo, Xiaomi, and HONOR show bright spots
Although vivo, Xiaomi, and HONOR recorded year-over-year declines in the fourth quarter, Counterpoint highlighted areas of resilience and innovation that may support their competitiveness moving forward.
vivo’s iQOO 15 drew attention for delivering strong “value for money” among devices powered by Qualcomm’s latest flagship chipset. That positioning matters in China’s crowded Android ecosystem, where consumers frequently weigh raw performance and pricing against brand loyalty.
Xiaomi’s 17 series gained early-quarter momentum, with Pro models standing out for an innovative rear display. Counterpoint also noted that the Xiaomi 17 Ultra launched two months earlier than its predecessor, reflecting an accelerated flagship cadence aimed at securing first-mover advantage. Faster launch schedules can help brands capture early adopters and media attention, but they also raise execution risks, including inventory management and marketing costs.
HONOR’s X70 and 400 series maintained solid demand, while the newly released WIN series drew attention for thermal performance. In a market where high-performance use cases such as gaming and video creation are mainstream, thermal efficiency can be a key differentiator, especially as devices become thinner and more powerful.
Memory price hikes loom as a major pressure point for 2026
Looking ahead, Counterpoint warned that rising memory costs could weigh on both device pricing and product strategy. According to Counterpoint’s Memory Tracker and Forecast Insights Report, memory prices are expected to rise further by 40% to 50% in the first quarter of 2026, followed by an additional increase of around 20% in the second quarter.
If those increases materialize, smartphone makers may have limited room to absorb higher component costs without impacting margins. Counterpoint expects OEMs to respond by optimizing portfolios, with a particular focus on scaling back low-end models to preserve profitability.
While a new round of national subsidies has partially alleviated industry cost pressures, Counterpoint said it remains cautious on the overall smartphone market outlook for 2026. The combination of soft baseline demand and rising bill-of-materials costs suggests that growth, if it returns, may be uneven and driven more by premium innovation and policy stimulus than by broad-based consumer upgrades.
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